‘Pak debt is relatively small as compared to the size of economy’

By Hassan Abbas
Published in Business Recorder on August 24, 2023

LAHORE: Rector Lahore School of Economics (LSE) Dr Shahid Amjad Chaudhry on Wednesday said Pakistan’s debt is “$85 billion”, which is small compared to the size of Pakistan’s trillion dollar economy (in Purchasing Power Parity terms).

He was addressing the Centre for Research in Economics and Business (CREB) and the Innovation and Technology Centre (ITC) at Lahore School of Economics, as it opened its 5th International Conference on Applied Development Economics (ADE) in Lahore in collaboration with International Growth Center and Consortium for Development Policy Research.

Shahid Chaudhry, in his inaugural remarks, talked about the peculiarity of Pakistan’s current situation in terms of losing macro-economic sovereignty in order to induce rollover of external debt.

Lastly, Dr Shahid thanked the international community gathered in the conference for helping the Lahore School of Economics push forward its vision of sustainable and equitable solutions to common challenges facing the world.

The conference is spread over three days from 23–25 August 2023 and includes presentations from international and local researchers working on issues related to economic development and sustainable growth in the developing world. It broadly focuses on the following thematic areas: Labour Markets, Industry and Trade, Political Economy and Institutions, Education and Health, and Climate Change with a crosscutting emphasis on gender.

The aim of the conference is to highlight recent research that can have lasting policy impact for sustainable growth in the developing world, provide early career researchers the opportunity to obtain feedback on their ongoing work and to start a mutually beneficial exchange of ideas and discussions among researchers on potential collaborations.

The first day of the conference opened with a plenary address by Dr David K Evans (Senior Fellow, Center for Global Development; Professor, Pardee RAND Graduate School) on getting the best teachers and helping teachers be their best.

Dr Evans stated that teachers’ salary makes up 80% of public sector budgets in education and human capital development and improvement in the quality of teachers has more impact on students’ learning outcomes compared to school based management, computer assisted learning and community based monitoring interventions. He also added that it is possible to improve the quality of these teachers dramatically through better preparation, selection and motivation.

The plenary address was followed by a session on trade policy and skills, chaired by Dr David K Evans. The first speaker of the session Anri Sakakibara (Dphil candidate, Department of Political Economy, King’s College London) discussed how the disproportionate expansion of the female intensive wearing apparel sector can trigger the structural transformation of the female labour force in a way which promotes gender equality at the household level.

She finds that women residing in provinces that are more exposed to the US-Vietnam Bilateral Trade Agreement (BTA) are more likely to work in the wearing apparel sector and increase their income relative to their husbands.

The second paper by Dr Hamna Ahmad (Assistant Professor, Lahore School of Economics; Research Fellow, Centre for Research in Economics and Business (CREB)) aimed at studying household decisions to invest in young women’s digital skills through a short-term online training programme in urban Pakistan.

While rejecting the unitary model of household decision making between parents and young adult daughters in Pakistan, the authors find that inefficiencies in household negotiation on incentive payments come through information asymmetry and not through payment targeting.

The second session on economic behaviour was chaired by Dr Farah Said (Assistant Professor, Lahore University of Management Sciences). The first speaker of the session Dr Christian Johannes Meyer (Director, Oxford Martin Programme on the Future of Development, University of Oxford) investigated the effectiveness of a psychological program designed to build “positive imagery” among a sample of Eritrean refugees in Addis Ababa.

The author’s preliminary results indicate that the intervention led to significantly more optimistic views of economic lives in the host economy. In the short run, they find that treated participants work more hours, have higher food security, and report improved wellbeing. The most likely mechanism seems to be a change in expectations about the future.

The second paper by Dr Uzma Afzal ((Assistant Professor, Lahore University of Management and Sciences (LUMS); Associate Fellow, Institute of Development Alternatives (IDEAs), and Fellow (Center for Behavioural Institutional Design (CBID), NYUAD)) explored the systematic heterogeneity in cooperative decision-making across spouses in arranged and love matched marriages in Pakistan through a lab-in-the-field experiment.

The authors find that in villages close to the city self-selected marriages are significantly more likely to be unconditionally cooperative and as distance from the city increases, the love matched effect declines.

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